Replacing Iraq's money was a rip off

Sometimes, in reading court cases, you run across things that make you shake your head in disbelief. Normally. When you read some of the cases that have arisen out of IRaq war debacle, you head practically explodes.

So just get this: according an entertaining decision filed by US Court of Appeals for the Fourth District in the case of  The USA v. Custer Battles,  the defendant contractors had been summoned to a meeting to defend their work for the USA in performing "Dinar Exchange Contracts" to replace IRaq's currency. Iraqi money at the time had Saddam Hussein's picture on it and the U. S. administration had decided that it needed to be replaced:

"The exchange was a massive undertaking. The new dinars were shipped into Iraq on 28 fully-loaded Boeing 747 cargo planes, and the exchange required the services of multiple contractors, ranging from providers of currency-counting machines to transportation providers."

But then, there were problems and so the contractors were invited to a meeting:

Problems developed with the quality of Custer Battles’ performance, leading to a meeting on October 18, 2003, between representatives of the Coalition Authority, the U.S. Military, and Custer Battles’ co-owners Michael Battles and Scott Custer.

With me so far? Well, it turns out that Custler Battles, the contractor charged with changing the Iraqi currency, had been padding its costs and presenting fraudulent invoices to the government. How do we know this, you may wonder? Well, because...

 "After this meeting ended, Battles accidentally left behind an astonishing spreadsheet, which contained rows listing items invoiced under the Dinar Exchange Contract and separate columns listing the 'Actual Cost' for the items and the amount 'Invoiced' for the items."

As Homer Simpson would say, "Doh!"

And how bad was this fraud?

This document showed, for example, that for the Baghdad hub of the dinar exchange program, Custer Battles provided two flatbed trucks, for which it paid $18,000 but invoiced the Coalition Authority $80,000. To provide "Life Support, basic level" at the Bagdad hub, it provided generators that cost $74,000 but for which it invoiced the Coalition Authority $400,000. And for the Basra hub, it spent $4,000 to provide laundry facilities but invoiced the Coalition Authority for $12,000. Thus under the Dinar Exchange Contract, Custer Battles improperly received the difference between the actual costs and the inflated invoiced amounts and also 25% of the inflated invoiced amounts.
 

And it just gets more entertaining. As it turns out, the money that Custer Battles was paid with was not US money -- no, it consisted of "seized" money that the US had gotten from Iraq. So Custer Battles apparently had argued that it wasn't US money they stole, then they shouldn't be held accountable for the money under the False Claims Act. With a straight face!

Now, just imaging all the instances of fraud by defense contractors that were not so easily detected.

Comments

[sas]

disaster capilitism run a a massive profit.